{"id":354,"date":"2020-06-21T09:48:57","date_gmt":"2020-06-21T09:48:57","guid":{"rendered":"https:\/\/www.kars4kids.org\/real-estate\/stories\/?p=354"},"modified":"2023-10-31T19:04:58","modified_gmt":"2023-10-31T19:04:58","slug":"why-donate-property","status":"publish","type":"post","link":"https:\/\/www.kars4kids.org\/real-estate\/stories\/articles\/why-donate-property\/","title":{"rendered":"Why would anyone want to donate their property?"},"content":{"rendered":"\n

That\u2019s a great question! In fact, that is most people\u2019s\nfirst reaction when they hear that Kars4Kids accepts donations of real estate.\nIn truth, it is the same reaction most people had thirty years ago before car\ndonations were commonplace. <\/p>\n\n\n\n

Nationally, the average annual donations per household hovers at about $5500<\/a>. Why would it make sense to donate property, where the average home value in the country<\/a> is over $200k? <\/p>\n\n\n\n

There are a few different factors that play into the success\nof our real estate donation program. One is that real estate is unlike many\nother assets in that it may have a negative value if not handled properly.\nHolding costs, like property taxes, maintenance, utilities, and association fees\ncan amount fairly quickly, and can sometimes eclipse the value of the property\nthat isn\u2019t being used. Additionally, real estate can incur tremendous liability\nwhether from environmental contamination, code violations, or injuries as a\nresult of neglect.<\/p>\n\n\n\n

There\u2019s also a large amount of effort that goes into\nmaintaining a property. Grass must be cut regularly (sometimes a few times a\nmonth depending on the region and the season). Broken windows and sidewalks\nneed to be repaired quickly. Snow and garbage need to be removed before someone\ncomplains. This could be difficult to keep on top of even when this is\nsomeone\u2019s primary residence, but what if it\u2019s a property located miles away or\nacross the county? <\/p>\n\n\n\n

Another factor is that while the average home in the US is\nworth over $200k, that value varies widely. While some homes in California are\nsold for many millions of dollars, there are homes in parts of the heartland\nthat sell for just a few thousand dollars. In small towns with a decreasing\npopulation, home prices can be so depressed, that a house can sell for far less\nthan the materials is costs to build!<\/p>\n\n\n\n

Lastly, people come upon their properties in various\ndifferent ways. Some receive a home as part of an inheritance, but live too far\naway or lack the resources to manage. Others purchased a home as an investment\nto rehabilitate and rent it out or sell for a profit (flip), but are caught by\nsurprise by the really poor condition or funds dry up before they have a chance\nto implement their plan. Still others purchase a land in a future vacation\nresort, and find that life circumstances change, and they no longer wish to\nbuild there.<\/p>\n\n\n\n

With these points in mind, it stands to reason that donating\na property to a qualified 501(c)(3) charity like Kars4Kids can be an attractive\noption to some. The responsibilities of property ownership, coupled with the\ncomplications of distance can make a property into a burden, and the benefits\nof donating can be a salvation.<\/p>\n\n\n\n

A qualified, professional real estate donation charity like\nKars4Kids can make the process easy, hassle free, and rewarding. We cover all\nthe costs of the transfer, deal with the title search and document preparation,\nand even send a notary to a location and time of the donor\u2019s choosing to\ncomplete the donation. The beleaguered property owner is now left with a\ngenerous tax deduction, and the knowledge that they were able to help children\nreach their potential.<\/p>\n\n\n\n

What are the benefits of donating real estate?<\/strong><\/h2>\n\n\n\n

When choosing to divest oneself from a property, most would\nimmediately think of selling. While that is the most common strategy, savvy\nproperty owners consider other options as well.<\/p>\n\n\n\n

Here are 7 reasons property owners have benefitted from\ndonating their real estate, as opposed to a typical sale:<\/h3>\n\n\n\n
    \n
  1. Selling takes time:<\/strong> While the average time to sell a home varies widely by market, the national average is 68 days<\/a>. Where there is high demand, a home can sell in a little over a month, in a slow-moving market, homes can be listed for many months, if not years. This is exaggerated further when trying to sell land. The average days on market for land<\/a> is about 7.5 months, but that can obviously run much longer when the land is looking for a very specific buyer (ie commercial developer), is located in a saturated or depressed market. If a seller is in a rush to move on from the property, either because he lacks the resources to hold onto it any more, or is located far away, or for any other reason, these time frames become difficult. With a professional, experienced real estate donation charity like Kars4Kids, the entire process can take as little as 3 weeks (or shorter!).<\/li>\n\n\n\n
  2. Unique property: <\/strong>Occasionally, a very valuable property can be very difficult to sell. While appraising for its true value, since there is a much more limited pool of buyers for such a property (whether residential or commercial), it can languish on the market for an inordinate amount of time, accruing large liabilities in the form of taxes and maintenance, before selling for the full amount. In such a case, the property owner can find it extremely beneficial to take the tax deduction to offset current income, and move on to more lucrative opportunities.<\/li>\n\n\n\n
  3. Tax savings: <\/strong>This is the most common motivation to donate. The full Fair Market Value (as determined by an appraisal) can be deducted from the donor\u2019s taxable income. This, in addition to avoiding Capital Gains tax on an appreciated property, can make real financial \u201ccents\u201d.<\/li>\n\n\n\n
  4. Broker\u2019s commission: <\/strong>When listing a home or property for sale with an agent, they will typically take anywhere from 4-6% commission on the sales price as payment for their service of facilitating the transaction. While their services are usually invaluable, this cut obviously significantly lowers the proceeds that the seller will receive. A minority of sellers (about 8% as of 2017)<\/a> do sell their home For-Sale-By-Owner (FSBO), but those homes typically sell 10% lower than with an agent. On the other hand, when donating, the property owner will benefit from the tax deduction of the FULL value of the property.<\/li>\n\n\n\n
  5. Helping a good cause: <\/strong>Of course the main reason to donate is the great feeling that comes with doing a good deed. Your property often has good memories or intentions attached to it and lowball selling it to an aggressive new owner is not a heartwarming experience. Do\u00adnating the property to Kars4Kids instead, can pro\u00advide a proper and respectful closure. Your dreams and hopes will be newly reflected in the eyes of the children benefiting from your kindness. For more information about our charity please see: kars4kidsprograms.org<\/a><\/li>\n\n\n\n
  6. Long distance property owners:<\/strong> There are many reasons why someone would own a property far away from their primary residence. Sometimes they own a vacation home they rarely use, other times it\u2019s a property they purchased as a long-distance investment or as part of an investment portfolio. Some are still holding on to their old home after relocating, and others receive a relative\u2019s property as part of an inheritance. Without being local, property ownership can become very burdensome. It will often require the additional cost retaining of a property manager, and will also be more susceptible to vandalism, squatters, and neglect. It is also more difficult to sell an absentee-owned property, as the owner is at the mercy of the local agent to give potential buyers information and access to the home. When donating the property, they are relieved of all these issues.<\/li>\n\n\n\n
  7. Hassle free:<\/strong> Owning a home or any property creates a lot of responsibility. Maintaining the property, managing a rental (or even worse, a vacancy) can be a full time project. Selling a home could be especially exhausting. Whether the intrusion of giving strangers access to the home for viewing at all hours, or the ups and downs of the offers and negotiations, it can all seem overwhelming. When donating to a charity with vast experience in real estate donations, like Kars4Kids, the entire process is effortless and rewarding.<\/li>\n<\/ol>\n\n\n\n

    What criteria does the charity consider before accepting\na donation? <\/strong><\/h2>\n\n\n\n

    Real Estate donations are a less commonly known charitable\ncontribution. Although a very generous offer on the part of potential donors,\nprudent charities will do research before accepting such a gift.<\/p>\n\n\n\n

    Some factors that are considered:<\/h2>\n\n\n\n